AT&T chief says that people are only paying for half the Internet

In an effort to explain his earlier comments about service providers like …

AT&T CEO Ed Whitacre has made a name for himself by making loud and repeated pronouncements about how people and companies are not paying enough for Internet access. First, there was the infamous "our pipes" comment, made last year as a warning to VoIP providers. Next came the blasting of Google and Microsoft for being freeloaders on the Information Superhighway. Now, to complete the hat-trick, Whitacre has clarified his comments by announcing that only half of people's Internet access is being paid for:

"I think the content providers should be paying for the use of the network—obviously not the piece from the customer to the network, which has already been paid for by the customer in Internet access fees—but for accessing the so-called Internet cloud."

These comments seem ridiculous when looked at closely. Customers aren't paying to access a "cloud," they are paying for access to another endpoint—it's not like MSN and Google aren't paying their phone bills. Proposing that both sides pay for the connection is similar to suggesting that both parties should pay for a long distance phone call.

Whitacre made these comments in a statement yesterday designed to threaten service providers with poor service if someone doesn't pony up for investment in new high-speed networks, and that someone is apparently not going to be AT&T. "We have to figure out who pays for this bigger and bigger IP network," Whitacre said, warning that without outside funding, investment in these networks is likely to "dry up."

The statements come just ahead of AT&T's annual presentation in New York for investors and analysts, and a few weeks away from the start of US Congressional hearings on the topic of "network neutrality," the concept that companies providing access to the Internet should not discriminate or favor any particular type of data being sent through the pipes. The debate over network neutrality has already become polarized, with some proposing that it is only natural for customers to pay extra for special services, while others arguing that it violates the very principles that the Internet was founded on, and could lead to the Balkanization of the worldwide network. Google has already come forward with a statement saying it will not buy into any "tiered Internet" plans.

AT&T is clearly in the former camp, and they are doing their best to convince anyone who will listen. "If someone wants to transmit a high quality service with no interruptions and 'guaranteed this, guaranteed that', they should be willing to pay for that," the AT&T chief said. On the surface, it seems reasonable. But customers who have already chosen to pay for higher speed broadband access have often found that the promised speed increases are simply not there, and the overall user experience winds up being pretty much the same. Nevertheless, faster access is coming, and according to AT&T, someone is going to have to pay for it.